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Gold - New 25 Year High

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LONDON (Reuters) - Gold rallied to hit a new 25-year peak in Europe late on Monday as fund managers shifted more money into the metal on worries about inflation, economic growth and the dollar, analysts said.

The metal traded erratically during the day, climbing in Asian business to its highest since March 27, 1981, before slipping 1.6 percent in Europe and then rebounding to set a new high.

The market is targeting the key level of $550 an ounce.

"People have had for many years a very negative view of gold and that view is now changing. There is a lot of wealth creation in countries that have an affinity with gold," said Robin Edwards, president of UK-based Sabre Fund Management."

"People are allocating money to gold," he said.

Spot gold was quoted at $545.30/546.00 by 1640 GMT, compared with late New York levels on Friday of $538.30/$539.00. It fell as low as $535.30 on Monday.

At the peak, gold was up more than five percent from a week ago, 18 percent from some two months earlier and 30 percent from a year ago. The price has more than doubled in five years.

Market talk that China and other central banks in Asia -- which jointly have $2.6 trillion in foreign currency assets -- might be looking to diversify some of their reserves into gold had underpinned sentiment since late last year.

China said on Thursday it planned to explore new ways of using the country's foreign exchange reserves and broadening their investment scope. It has 600 tonnes of gold in its reserves, accounting for only 1.2 percent of the total.

"The risk of playing in the market from the short side is quite high currently. I still see further gains over the short term, but once it hits $550 then the sentiment could change," said Yingxi Yu, precious metals analyst at Barclays Capital.

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Note sure if hes right, a lot of people see this hitting through $600 in the next few months ?

Counting inflation into the equasion this doesnt really equate to a 25 year high does it ? If not, why do people choose to ignore this factor ?

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people were expecting a pullback about a week or 2 ago, but it kept driving forward.

I believe personally itll shoot past 600 this year, but i have no funky graphs to prove this :)

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Hit $550 about 45 minutes ago. Pulling back now. I'm hoping it will pull back a bit more as i have just tried my first short trade hoping to increase my holding a little.

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Hit $550 about 45 minutes ago. Pulling back now. I'm hoping it will pull back a bit more as i have just tried my first short trade hoping to increase my holding a little.

:P how low will it go ? im hoping to nip in and increase my holding will we see it dip below 500?

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Be careful going short, guys.

There's been a lot of talk about Elliot Waves and so on, since just before Xmas, after the drop after Dec 12th and the following rally. According to the theory it should have corrected to 465-485, but Gold just wasn't interested. If you followed the theory and went short you might now have badly burnt fingers now. I think even Dr Bubb elsewhere on the forum suggested it might go to $478. But it's just gone up and up with occasional pullbacks which have lasted a few minutes. It might still drop, but the recent pattern has been for minor, short-lived pullbacks. It's hard to call ... until after the event, when we all become experts.

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All i know is just 3 or 4 months ago i was buying gold from goldmoney for £250 Oz now to buy the same Oz from goldmoney it will cost £322.

I just hope i can get a few more quid into it before it gets reported to much in the papers, although i reakon silver might do pretty good on pure speculation especially when it can be bought so easily online and its cheaper.

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On the subject of going short, this is interesting, if not amazing (if it's true):

"Barrick Gold is the largest gold hedger in the world, holding a short hedge position of almost 13 million ounces. In the last quarter alone, because the price of gold increased by roughly $43, Barrick should record a mark-to-market loss of $560 million on its gold short hedge. The loss for the year and half-year comes to a cool billion dollars. This should increase the total outstanding loss on Barrick hedge book to just shy of $3 billion. With Placer added in, the loss has to be greater than $4 billion.

The almost $3 billion open gold loss on Barrick’s books is greater than their cumulative total profits for the entire existence of the company. To my knowledge, it is the largest derivatives loss in history. I ask you to think about that for a moment. The world was atwitter with the recent $200 million copper loss by China, as well as the $500 million oil loss and bankruptcy by China Aviation Fuel (Singapore) last year. Barrick is set to report a $560 million gold hedge loss for the quarter, $1 billion for six months and almost $3 billion in total, and the financial world looks the other way. "

You can read it in full here:

http://www.investmentrarities.com/01-03-06.html

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The powers that be have chosen hyperinflation rather than deflation. Time is almost up and the game will soon be over.

Switzerland completed the sale of half their gold reserves in june 2005 (in case anyone wondered why gold started going up since). The US is broke and the dollar is about to sink. The Chinese are planning to differentiate their foreign reserves. Iran will soon start selling oil for euros and will be attacked by the US that can't allow this to happen. Central banks will engage in competitive devaluations.

Big commercial gold short must be getting nervous. Look at the V bounces like today.

The correct strategy, I will never tire to repeat, is to accumulate on pullbacks and ride the bull to the end, i.e. when you can buy the Dow with one-two ounces of gold. It still takes 20 today so it's a long way up.

Protect yourselves.

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The powers that be have chosen hyperinflation rather than deflation. Time is almost up and the game will soon be over.

Switzerland completed the sale of half their gold reserves in june 2005 (in case anyone wondered why gold started going up since). The US is broke and the dollar is about to sink. The Chinese are planning to differentiate their foreign reserves. Iran will soon start selling oil for euros and will be attacked by the US that can't allow this to happen. Central banks will engage in competitive devaluations.

Big commercial gold short must be getting nervous. Look at the V bounces like today.

The correct strategy, I will never tire to repeat, is to accumulate on pullbacks and ride the bull to the end, i.e. when you can buy the Dow with one-two ounces of gold. It still takes 20 today so it's a long way up.

Protect yourselves.

Agreed great advice. Trouble is I'm struggling with whether there is a pullback coming in the next week or so or not - and whether to but now or wait a bit. I think there are quite a few others pondering the same thing.

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Another record... gold just shot up to $555/Toz! At this rate it'll be through $600 sometime in February.

This is turning out to be the greatest run of luck I've ever had in my life. Just wish I'd bought more of the stuff when it was cheap(er).... it's still pretty cheap.

Edited by malco

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Another record... gold just shot up to $555/Toz! At this rate it'll be through $600 sometime in February.

This is turning out to be the greatest run of luck I've ever had in my life. Just wish I'd bought more of the stuff when it was cheap(er).... it's still pretty cheap.

Yeah, investing in Gold was the best decision I have ever made. I have even earned more money than I earn in a year doing my part time job!!! Not that I'll give it up like, I aint stupid!

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So how high are you waiting for it to go before you jump in? :P

Does anyone think they'll be buying actual physical gold if it hits, say $700 a troy ounce??? Dont think i will - its bubble country maybe even now. Various sources say gold is CHEAP now - so everyone should be piling in - but something does make us doubt and hold back.

Does anyone else think theres a certain point where they WONT buy??? Gold looks pricy even now, and some of you are waiting it to fall first - especially as it doesnt do anything but sit there and shine away...

Edited by trev

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I don't think gold is in bubble country. Historically it is undervalued by all these measures:

http://www.golddrivers.com/gold&Historicalnorm.htm

And look at Riser's graph of its historical value in inflation-adjusted-sterling terms (and think of a graph of a real bubble like house prices in comparison):

thanks thats useful - i m not much of a speculator and only using gold to protect myself rather than as a money making execrise.... Just worried about people who might be taking out big loans and gambling on it! And i am sure many people will do this no doubt....

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Does anyone think they'll be buying actual physical gold if it hits, say $700 a troy ounce??? Dont think i will - its bubble country maybe even now. Various sources say gold is CHEAP now - so everyone should be piling in - but something does make us doubt and hold back.

Does anyone else think theres a certain point where they WONT buy??? Gold looks pricy even now, and some of you are waiting it to fall first - especially as it doesnt do anything but sit there and shine away...

I bought at $400 and $500 and I also plan to buy at $600 and $700.

All my best investments have been from buying lesser amounts(gold & shares) at regular intervals rather than 1 off purchases of larger amounts. This is safer but the potential is less.

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I look at it this way:

Will gold rise more than 4.17% (Net interest from my savings account) + 3.39% (buying cost) over the year? I believe so.

Am I prepared to lose about half of my initial investment (the worst possible outcome). Yes I would.

I would never borrow money to invest. I aint no pro!

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I am no expert trader.

I have invested initially at 470$ thanks to this forum.

Added substantially during breakout at 480, 490 and 500.

Foolishly bought at peak 535$ just before pullback.

Bull markets, however, forgive mistakes.

I have invested 28% of available cash. This is probably satisfactory. although I would like to add more.

I am planning to invest small amounts at regular intervals, and in pullbacks when they occur.

In retrospect it would have been ideal to invest everything at the beginning. Who has the guts to do

that? Investing in regular intervals, reduces the risk, since the gains from initial investments offset any

potential loss in subsequent investments.

We are currently in the 2nd phase of the bull market and the gold price has taken the form of a rising parabola. In this situation shorting (profit taking) is more dangerous although some sharp pullbacks are expected.

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wow 50K is a lot of wad!

I hope you have spread yourself well in other areas!

Many people have ruined themselves buying shares but I never heard of anyone losing their shirt buying gold! Quite reassuring really. B)

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Many people have ruined themselves buying shares but I never heard of anyone losing their shirt buying gold! Quite reassuring really. B)

Well, the gold market is risky just like any other market and should be treated with care. It's in a bull run right now but that doesn't mean it's safe.

In my opinion it's starting to look quite overbought in the short term.

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Well, the gold market is risky just like any other market and should be treated with care. It's in a bull run right now but that doesn't mean it's safe.

In my opinion it's starting to look quite overbought in the short term.

The way I see it, you can certainly lose money in gold, but you can't lose the lot the way you can in shares. You can buy shares and watch them vanish to nothing. My father bought Marconi shares, on professional advice. The shares dropped 90% in value following the scam in the US where they got ripped off by some bloody crook. That cannot happen to gold at the moment. The very worst case scenario is that gold might fall back to $250 over the next few years. However, I just can't see how that can happen absent some extreme deflation. Gold can never be worth nothing.

On the other hand, there will I suspect come "peak gold", and those who buy at the peak will indeed lose most of their money. Serves them right for being stupid.

It will be important to make a quick exit at just the right moment. Even getting it wrong by a few days after years of pure bull could cost you a lot. In a way, I am not looking forward to that, because I know the last days of this are going to be absobloodylewtly nerve-wracking.

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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